In Case You Missed It – 2017 Benefits Compliance Developments

As attention has focused on developments regarding the status of the ACA and the proposed, new American Health Care Act (“AHCA”) during the first six months of the year, other items may not have made front page news. This is a summary of various 2017 developments that may be relevant to your organization.

The required contribution to reinsurance fee for group health plans expired on schedule 12/31/16 and is not applicable for 2017.

The ACA non-discrimination rule for fully insured plans (IRS 105(h)) remains delayed and not in force.

The HIPAA HPID and certification requirements remain delayed and not in force.

The ACA reporting requirements for 2016 were in effect as scheduled and due earlier this year. Until recently, the IRS had done no meaningful enforcement or follow-up on the reporting for 2015 or 2016 other than incorrect employee names and SSNs. However, the IRS has recently initiated the penalty process for employers failing to comply with the ACA reporting requirements. Employers potentially subject to the reporting requirement may receive the IRS notices, called “Request for Employer Reporting of Offers of Health Insurance Coverage (Forms 1094-C and 1095-C)” – known as Letter 5699 forms.

The ACA Play-or-Pay requirement remains in effect. However, to our knowledge the IRS has not penalized any employer or enforced the mandate for 2015 or 2016.

Certain small employers – those that are not ALEs and do not sponsor a group health insurance plan – have a new HRA option, known as the Qualified Small Employer HRA. These plans may reimburse out-of-pocket health expenses, including individual health insurance premiums previously prohibited by the ACA.

There is a new privacy notice requirement for wellness programs under EEOC rules.

There is a new HIPAA special enrollment right for mid-year group health plan enrollment of employees and dependents who have lost coverage in an individual market or exchange plan.

There are new content requirements for Summaries of Benefits and Coverage (“SBCs”) for group health plans.

In some markets, there has been an emergence of COBRA litigation against plan sponsors for alleged administrative failures, including provision of compliant initial and election notices.

A number of states and local jurisdictions have enacted or sought to enact laws required paid parental leave.

HIPAA enforcement activity continues for Covered Entities and Business Associates.

HHS finalized market stabilization rules for the Health Insurance Marketplace in 2018, including a modified open enrollment period (November 1 – December 15, 2017).

The U.S. Supreme Court voted to extend ERISA’s religious exemption provision to benefit plans maintained by church affiliates, regardless of whether an actual church established the plan. Specifically, this is a victory for certain hospitals and other church-affiliated entities seeking freedom from ERISA's plan requirements.

The IRS issued the most recent commentary on so-called “wellness” model designed to artificially inflate the tax savings for employees. Here is a link to the newest Chief Counsel Memorandum, the most recent of three similar items released since April 2016.

DOL, HHS, and Treasury issued new FAQ guidance addressing mental health parity compliance under the Mental Health Parity and Addiction Equity Act. The FAQ addresses treatments for eating disorders and includes a draft form for use by participants and representatives to request plan documents concerning a plan's or insurer's MHPAEA-related compliance.

The IRS announced relevant maximums and inflation adjusted limits for 2018. As part of the 2018 maximums & limits, the IRS announced the 2018 ACA affordability percentage as 9.56% (reduced from 9.69% this year). The 2018 Health FSA max has not yet been announced. It is expected to be $2,650. If the ACA rule is repealed, however, no Health FSA maximum will apply for 2018.

A Word of Context

As I have stated before, this remains a transition year in many ways for employers and advisors. We are in a virtual “limbo” position during this period when the ACA is still in force but there is lack of certainty and predictability about government enforcement and what Congress may do and when. In this transition period, our advice remains for employers to continue to follow the terms of the ACA, address other applicable rules, and as much as possible revisit the basics to ensure that there is no liability for issues previously taken for granted.